Viking Holdings Ltd. (Bermuda) Q4 FY2024 earnings call

Management Statement and Operational Highlights

• 2024 performance was remarkable with 6.3% capacity growth, 7.4% net yield increase, adjusted gross margin over $3.5 billion, adjusted EBITDA $1.3 billion (up 23.7%), 40.8% return on invested capital, and 2.4 times net leverage.
• Key milestones in 2024: Became publicly traded on NYSE, received 2024 North America IPO of the Year award, ranked #1 by Conde Nast Traveler consecutively, returned to China, and discovered a new penguin colony in Antarctica.
• Fourth quarter 2024: Total revenue $1.4 billion (+20.5% YOY), adjusted gross margin $870 million (+19.5% YOY), adjusted EBITDA $306 million (+39.7% YOY), net income $104 million vs. loss $594 million in 2023.
• 2025 outlook: 88% booked for the year with $5.3 billion advance bookings (26% higher than 2024), core capacity growth 12% with delivery of 10 river ships and 1 ocean ship, and signed options for 8 additional river vessels.

Segment Performance

• River Segment: Capacity PCDs increased 3.7% year-over-year. Adjusted gross margin grew 15.8% year-over-year to $1.6 billion. Net yield was $533, up 11.7% year-over-year. Occupancy was 95.4% for the year.
• Ocean Segment: Capacity PCDs increased 6.2% year-over-year. Adjusted gross margin increased 12.1% year-over-year to $1.5 billion. Net yield was $522, up 5% compared to the previous year. Occupancy was 93.9% for the period.

Guidance

• As of February 23, 2025, 88% booked for 2025 with $5.3 billion advance bookings (26% higher than 2024).
• 2025 core capacity growth 12% with delivery of 10 river ships and 1 ocean ship.
• 2026 and 2027 seasons open for sale, but focus remains on 2025 for now.

Risks

• Market uncertainties and cyclical nature of the travel industry.
• Potential impact of economic downturn on high-end travel demand.
• Competition entering the river market, though Viking has significant market share and order book.

Question and Answer

• Q: Why haven't added 2026 into booking curves yet?

A: Focus on 2025 season, 2026 is ahead of 2025 but will update in next call.

• Q: Response to new competition?

A: Viking has 52% market share, large order book, strong customer satisfaction, and unique ship design/talent.

• Q: Demand trends by region?

A: 88% sold for 2025, strong Q4 and January bookings, 2026 ahead of 2025 in volume and rate.

• Q: Barriers to entry for new entrants?

A: Valuable docking rights in key cities like Paris and Karnak Temple, long-term contracts.

• Q: CapEx and excess cash?

A: Prioritize organic growth with strong order book, cash reserve for stability and flexibility, potential acquisitions if right opportunity.